Selling Furniture is Divergent to Selling Airplanes

Customer/Builder Divergence

When making a presentation to corporate heads, it is best understanding the audience. Better than the audience knows itself. If you don’t, you lose the audience in a divergence. They, the audience just doesn’t get it. Parry this down to the Board Room level, with a marketing representative, the presenter, who must become a chameleon in the room. They must understand the divergent dichotomy of decision making from the selling company as compared to the buying company. 

A sales person has a lot riding on its effort for those thousands of workers back at the factory. I know this on a small scale as I was owner and sales rep for the small factory of workers back home. I needed to keep their jobs intact, pay the materials bill, and meet payroll in one road trip.

Not only was I involved in the many-hats-I-wear division, I designed the product with the work force made advertising, and cold calls over a seven western states region. On and on went the duties for this small endeavor. It’s not much different than what Boeing does for its $$billions, as I was dealing with thousands of dollars.

·       The first task is to find out what does a customer want, not what you have for them.

·       The second task is understand a customer’s vision and how they see themselves obtaining its goals and objectives. Not thinking what’s printed on the company’s flyer for a mission statement.

·       Talk about dreams, aspirations and failures.

·       Know your enemy (Competitors) better than the enemy knows itself.

Once you have established a relationship and common knowledge you are almost ready to start sales. I never hurried the relationship part, as a bond must form first, and a trust evolves during short exchanges on ideas and opinions. I generally morphed into the person I wanted to sell to not out of some kind of patronizing effort, but out of the necessity of knowing your customers heart. I remember one time going to a customer on a cold call, driving through western United States. I think it was Idaho Falls, Idaho. I was 350 miles from my home shop. Nothing had happened on this trip. I was enthusiastic about the product, I had a stake in it, and I didn’t even know the next person I was going to tell about it!

So I pull up to this fancy store because it had space to park my truck and trailer. My trailer contained samples and furniture to sell. Not airplanes, but furniture. Walking into the store, I hunted down the person in charge of buying. No letter of introduction, no prior conversation and no appointment. So I told him like it was straight up, and then broke the Ice with asking him how it was going for him? We got it going by not talking furniture product. I told him how many places I had gone to this week, and people I had talked with. In particular to him were his competitors. He wanted to know what they were carrying in those stores. I told them everything they got came out of South Dakota. This also, was my main competitor in furniture making. They had a rail siding bringing in materials. I knew I only had this truck and it is nice truck, but I didn’t tell this man about how small we were. I only said they were our chief competitor, and we had made progress over what they did. He said, “Let me see”.

I went out to the trailer and set down a sample of each furniture type. By now we were on the same team slaying that same South Dakota monster furniture builder. We were no longer divergent, disparate or unalike. His problem now had become my problem. I was on to something, and I had a solution to both our problems. I had the high ground of a great product bonded with this company’s need to compete.

I then sold a hundred pieces that day and a hundred more each month because he blew them out of the store for a ridiculous low price, and still made money. Much like selling airline tickets flying with this furniture.

This story was repeated over and over again. I remember going from 100 production pieces a month to twelve hundred pieces a month in one year.

Boeing on a much grander scale has now obtained 1276 orders this year similar to what we built in a month. It was good stuff and people responded in spite of the South Dakota hype machine. I didn’t wear a tie, but I could tie a deal, because it was fun selling something that was so good.

Qantas A-380 Renacted Safe Landing After Engine Destruction

Part II The Movie:

Below is Qantas Flight 32 renacted on video of what happened after a castastrophic engine explosion in 2010. It was due to an oil fire in the engine housing near the main turbine disk. The Saturday feature is for your own information as a follow-on with an earlier Scrap book feature on LiftnDrag from July 26, 2013. Enjoy the video, well done.

Liftndrag Scrapbook Feature The Qantas A380 Incident in 2010

"This is just one thought for flight management. The main thing is to: 

• simplify pilot options of a hugely complex aircraft, 
• give the crew committee the best information during decision making,
• and present best available options with priorities. "

Delta Order Playback

Delta recently ordered 25 A330 NEO and 25 A350-900's. Here are the three talking points for this order.

• Time
• Timing
• Timeliness

There is a time when Delta is ready to move. That time is now, irrespective of where the Airplane builder has a slot or a position for its accommodation in time. The time is now for Delta to upgrade the fleet. Could Boeing answer the order bell? No they couldn't, as the 787 backlog swamp and the future 787-10 planes are way down the road considering Delta's time piece. Boeing can't meet Delta's corporate time-line.

The second point is timing for Delta. They need to receive these aircraft in a timing sequence, in order to fulfill its fleets expansion in a seamless motion.  It needs a whole new fleet improvement from latest technological aircraft that are efficient without waiting. The timing failure is from a Boeing order book predicament, which would swallow Delta with the cost of waiting on a long order book.  Airbus answered this question sufficiently, it could meet Delta's timing with A330's and the All New A350, where the 787-10 is not going to be ready until 2020. Delta could also reieve an A350-900's sooner than the 787-9. Left out of Delta's conversation is the 777X. This model also falls out of timing until 2020, even if Delta were first in line to receive one. A Delta 777X would be more likely arriving in 2024 than 2018 because of prior customer's build slots. A 787-10 is more likely in 2024 than 2018. That leaves Boeing timing for 2018 on the backs of the 787-9, which does not reach the broad spectrum of Delta expectations for 315 well placed passengers. The 787-9 could compete with what Delta wants, but thy have a backlog problem. The A350 is at 750+ orders and also has a backlog problem for Delta,  but has more flexibility within its order books, as the A350-800 and A350-1000 are not in play yet. They are planning a build-up on the A350-900 production during 2014-2018 where it will begin streaming aircraft towards Delta in 2018 with its A330 NEO followed by the A350-900 later.

Motley Fool Photo Credit

Delta sore card:

• 787-9 wouldn't be delivered in Delta's window by 2018.
• A330 Neo is a rebuild and upgrade project it can do, fitting in the Delta 2018 window.
• 787-10 isn't even built or tested and won't be ready for Delta for six more years as it would wait behind 132 787-10 orders.
• The A 350 is starting its delivery in days (December 13), and a delivery schedule has holes in it for Delta sliding in at a regular pace from 2018-2020, fitting its growth model. The 25 unit A350 production slots can be fit-in during 2018-2020 time frame at a rate of one a month.  
• Boeing is booked-up as its own production schedule, when others have dropped or asked for delivery extensions. Even Delta has extended out its own 787's delivery schedule from its prior ordered 787 models and Boeing back filled those openings. Boeing couldn't promise more slots to Delta from other customera. Demonstrating how critical delivery is for Delta during a fleet renewal period it went with Airbus.

This brings us to the final talking point timeliness. Boeing is producing a balance of 787-8 and 787-9 in a simultaneous effort, appeasing its own customer thirst for the 787. The model is exceeding in spite of "787 glitching". Its far more complicated than what Airbus offers, and will continue its maturation for another thirty years. Having said that, Boeing is primed for an airplane sales explosion in 2015 and couldn't help Delta, even if Boeing's eyes were bigger than its stomach. Boeing will say anything to close the deal as would Airbus. But Delta looked at each company's position and decided that Airbus was less encumbered with order status, and therefore the likely hood of timeliness is more predominate with Airbus. This is built on several assumptions. One is that that Airbus will not endure any 787 like faults since it employs standing technology fully vetted for reliability. When Boeing reaches its final vetting process for its systems and battery. The 787 will be a great and greater airplane than what Airbus offers in "Time". Boeing's full 787 and 777X potential will then be reached, setting Airbus back decades in the race. I would expect Boeing will transfer "in-time", the "All Electrical Architecture" to its sibling aircraft, but not until all faults are resolved in the maturation process. Timeliness is a perception issue for Delta, more than an actual problem with Boeing. They see Boeing biting more off than they can chew with quantum leaps in technology and concurrently running projects. Delta views Airbus timeliness more achievable as it had taken the lower road for airplane progress. They have bet on Airbus timeliness with this order, which fits its own corporate goals.

Home work is a good assignment for readers. Below is a link of a fairly minded view on the Delta decision, and is not neccessarily a bad thing for Boeing. I recommend reading this article as it may shead more light on the subject, as it did for me.

Motley Fool Reference Below:

Why Airbus Got a Big Order From Delta Air Lines Inc.

Almost Missed This: Ryan Air Books 100 737 200C's with Boeing

Asleep at the order switch was I, as Ryan Air and Boeing booked the deal on November 28th which was announced as an intent, a little while back (September 2014), saying they would sign when enough cash is printed. What lies beneath this order was not mentioned in the below link, as this is a new class 737 holding 197 seats for Ryan Air. It has an additional door, less kitchen amenities but keeps the Max efficiencies. This aircraft is designed as a Ryan Air passenger work horse. 100 options on this order were added per further news reporting.

File Photo Rendering for 737-200c

Air Transport World Link and clip below:

"Boeing capped the month with the Nov. 28 finalization of Ryanair’s order for 100 737 MAX200s (valued at $11 billion at current list prices). Bookings logged earlier in the month included 80 737 MAX 8s for SMBC Aviation Capital (valued at over $8.5 billion at current list prices); six 737 MAXs (variant undetermined) to an unidentified customer; four 737-700s (valued at $313.2 million at current prices) to an unidentified customer; 30 737 MAXs (variant undetermined) to a third unidentified customer; and a 787-9 Dreamliner (valued at $257.1 million at current list prices) to Virgin Atlantic."

Rendering of Boeing 737-200 C

However, 737-200C options are mentioned on this link below:

Options are reported in Link:

From, Aero Space Manufacturing and Design:

"Dublin, Ireland –Boeing and Ryanair have finalized an order for 100 737 MAX 200s, valued at $11 billion at current list prices. The order, originally announced as a commitment in September, includes options for 100 additional 737 MAX 200 airplanes, and makes the Irish low-cost carrier the launch customer for the newest member of the 737 MAX family of airplanes."

Other airlines are measuring Ryan Air's metrics on this configuration, and I believe competitors will follow suit for its higher density single aisle routes. I would expect conversions from prior orders over to the 737-200C Max and addtional new orders for this configuration.

Li-Ion Battery 101 From The NTSB.

The battery simplified. In order to not oversimplify Boeing’s  battery with the National Transportation Safety Board (NTSB) determination regarding its battery fires, and mishaps, it is an attempt to lay out what went wrong during 2013 and what the state of the Boeing battery is today. I have in other blogs attempted an objective understanding of battery woes, particularly the Lithium-ION monster that grounded Boeing. Since they are the world’s largest airplane maker in sales and production at this time, Boeing bet the bank on its LI battery problem. They willed a resolution from its failure. The NTSB came back and pointed fingers at the Battery manufacturer GS Yuasa, FAA, and Boeing.

I have learned several things of importance from the NTSB.

1.       At the time of testing and development the NTSB was not involved and could not help.

2.       FAA was well out of its technical scope giving oversight to both Boeing and GS Yuasa.

3.       FAA deferred from its own battery technology weakness, to both GS Yuasa and Boeing when they in return presented to the FAA engineering solutions. FAA did not have the expertise to give oversight.

4.       In this gap of expertise for both Boeing and FAA they deferred to the battery manufacturer when that manufacturer had never before built an airline battery of this stature until the 787.

5.       A cascading event leading to the battery failure was about to expose the depth of everyone involved knowledge, and its understanding of battery failure concerning a mitigation process for inherent risks. The NTSB has the high ground in this case, and they have spoken even though Boeing has installed battery safety through measures enumerated in 2013.

Below is a flow for resolving battery risk without knowing a precise moment of failure and its cascading consequences.

GS Yuasa did not meet a high enough standard of battery production, consistent to aviation risks. Impurities were allowed-in or missed during processing this battery’s substrate. Faults and flaws within the battery would lead to failure eventually. They have currently upped its aviation battery standards since 2013. Aviation LI-ION batteries now follow a tight standard and production protocol mitigating any impurities previously found in the battery.

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The “Boeing Safe Battery system” is safer than any electronics battery found on equipment today.

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Boeing engineering set voltage regulation too high at first, when sending electricity from its generators.  The Boeing problem: inputs electrical flow into the battery having a wide range of voltage spikes, beyond what would be safe, for a vulnerable battery not aware of  “shorting worthy impurities”. It was a big unaware of risk for Boeing during early testing and commercial service. Boeing has seen to it by narrowing and regulating the voltage spikes coming into the battery, which makes it safe for the battery, and will not cause shorting found within a battery impure substrates.

Boeing doubled down by encasing the battery with a stainless steel housing. It robs the battery encasement from oxygen, therefore no fire potential just battery heating. Further it vents the battery encasement by going outside the airplane where any toxic gases produced during a battery crises is dumped safely from the crew and passengers. Boeing presented a worst case scenario to both the FAA and NTSB, demonstrating a total battery pack failure, fire, or explosion. Showing it completely contained at all times. Plane flies on until safely landing. Only the airline deals with the mishap not the passengers during flight.  

:

The NTSB is concurring with what both GS Yuasa, battery maker, and Boeing on product saftey, while pointing its finger on Boeing and GS Yuasa for its failures. Both were out there winging it with battery technology without having federal governance (FAA) who was or is incapable of giving oversight with this technology. It is an emerging technology, where no one has gained an “arms around it” mastery. Boeing has corralled it in a safe area good enough for extremely safe flying for its customers. The good news is that aviation is using the Li-ion battery in its current evolution which will spur on further and complete mastery over battery development. On my first DC-3 ride, I remember watching sparks coming out the engine cowling, like we were on fire. We were flying over the continental divide. I felt I was in a “Lost Horizon” movie going into Tibet. It was winter and it was snowing, but the sparks have been long replaced by the likes of the 737, 777 and 787.

End Of November Macro Stats (Updated 12-4-14)

A quick look at the chart belows sees an off production month for Boeing with only six 787 delivered. Will they make its goal in 2014 for 110 787's? Here is the pent up factory backlog in forward position for delivery. Starting with two 787 already delivered in December knocking down the goal to 12 to go. Here is the backlog energy in waiting on a short production Month with Christmas, vacations and New Years eve.

Delivery waiting for customers (4 more Dec). They should deliver as they were ready in November, meeting a goal of 10 in the first two weeks weeks of December.

Production testing maturity before "Ready for Delivery" status- 10, 787

5 aircraft have 3-5 tests flights already, and can be ready for delivery by the 10th of this month as my own prediction.

5 aircraft each have one test flight and its feasible for December delivery.

Customer hesitation on its own financing, or quality inspections with a Boeing remedy could cause problems for Boeing, as it may roll a few deliveries into January per customer direction. However its possible for Boeing reaching its January 2014 goal of delivering 110 787 aircraft in 2014. It is equally possible Boeing will fall just short of the goal with units standing at 100% completion on the 2014 flight line, but delivered in January of 2015.

Goal +/-                          *09/2014    **10/2014         Projecting    November  (actual) Delta 

Month Deliveries              10            **11             10              6.0                     -4

3 M-M-avg                      10.33          11.33            10             9.0                     -1.0

Production Goal               10               10              10             10                          0

Delivery Trend (+/- )       + .33            +1.33                   . 0            -1.0      /Target       >                

                                       *PM-Start      **M.A.P.                         PM-End

*Progression Months

**Moving Average Progression

Other Notes on the 787 Production analysis.

Total Year To Date 787:   98 (2 December deliveries already counted)

2014 Goal                       110

One Month Goal               14

Net to go in December     12

Round 8 Boeing Battery Fight Over

Boeing's battery caught fire in early 2013. Fleet grounded. Round 1 ended with Boeing's 787 laying on the mat for three months grounded! Round eight ends with the FAA coming out with a proclamation as referee breaks up the combatants from clinching each other. It has removed the battery and the airplane to its respective corners. What has been found is a series of fact finding flawed procedures and naivety about the Lithium Ion battery in service. Engineering design didn't account for battery usage under the Airplane conditions. Or otherwise know as underestimating the complexity of 787 demand on the LION battery. Boeing has since mitigated the underestimation of design parameters by taking multiple steps in overbuilding the battery system over the last several years.

Round 9 is compliance and agreement by Boeing on these findings. Correction are completed and become part of the Boeing LION engineering process.

Round 10: Knockout of the problem, a high level of reliability is established with a high number of airplanes and a higher number (million) of flights with no problems.

Dreamliner battery fire triggered by Boeing design, probe finds
Chicago Tribune link: By Alan Levin, Bloomberg News,
Bloomberg"Inadequate design and testing caused last year's battery fire that led to the grounding of Boeing's Dreamliner jets for more than three months, investigators concluded."

The FAA faulty trail:

• "The fire occurred Jan. 7, 2013, while a Japan Airlines 787 Dreamliner sat at Boston's Logan International Airport. Boeing uses two lithium-ion batteries in the Dreamliner to power electronics and other equipment. It was a short circuit in one of the battery's eight cells that triggered a runaway failure that engulfed the entire power pack, the NTSB said.
• Cells may overheat when large amounts of power are being drawn and better protections should be installed, the NTSB said.
• The Japan Transport Safety Board found in a Sept. 25 report an internal short-circuit "was probably" at fault though it was impossible to say what prompted it.
• As part of that design, Boeing installed two lithium-ion batteries, which hold more energy and last longer than older technology. Those factors also make them potentially more dangerous because they are made with flammable chemicals and contain enough energy to self-ignite if they malfunction.
• Boeing had estimated that the chances of a single cell on one of its 787 batteries failing and venting flammable chemicals was one in 10 million. When the second failure occurred in Japan, the aircraft had flown just 52,000 hours, according to the NTSB.
• This miscalculation was part of a cascading series of failures in the design and certification process, the safety board concluded.
• The battery tested for possible failure by GS Yuasa wasn't the same as the ones installed on the Dreamliner fleet and the tests didn't anticipate the most severe conditions seen in service, the investigation found.
• An inspection of GS Yuasa's manufacturing plant by the NTSB found evidence that foreign debris was allowed to contaminate batteries, "which could lead to internal short circuiting."
• The company's inspections also couldn't detect other internal defects capable of producing short circuits. The report didn't blame those issues for the fire.
• Boeing also failed to anticipate the battery's risks, the NTSB said. The company's engineers didn't even consider the potential for a single cell overheating and igniting adjoining cells, according to the report.
• The FAA didn't give its inspectors sufficient guidance on overseeing the battery design and the agency lacked expertise, according to the NTSB.
• The safety board has no regulatory authority and must rely on non-biding recommendations to improve safety.
• In response to earlier recommendations, FAA Administrator Michael Huerta told the NTSB that the agency is studying additional battery test requirements, according to an Aug. 19 letter. The agency is working with RTCA Inc., a Washington-based nonprofit that advises the FAA on technology."With assistance from Julie Johnsson in Chicago.

Boeing has narrowed the voltage regulation parameter of power entering the battery. Power surging is mitigated, allowing only a power stream within safe limits. Boeing has gone to the battery maker requiring a tighter inspection and testing of the battery construction. Special monitoring is enacted for foreign debris within the cells, and its detection of extremely small battery faults found during manufacturing. Boeing has taken extra measures for catastrophic battery failure during operation, protecting customers and crew from any battery failure. Since batteries are primarily used on the ground under static configuration, the 787 flies with direct power from its engines without battery backup. During a catastrophic failure of engine power or battery failure, the 787 can apply fly with RAT air power or auxiliary electrical engine power, supplying electrical power to its systems until a crises resolution is found. Aircraft today have redundancy making the battery obsolete during flight and final approach. The current Boeing battery protection is an overbuilt mitigation of its underestimated engineering faults now under review and implementation of redesign.

The Road To The 777X Is Paved With Creative Options

The 777X will be coming none too soon after its announcement of its inception in November of 2013. The problem Boeing has is the eager anticipation for the 777X, and what to do with selling a seemly dull prospect of a brand new 777-300-ER, an airline might add to its airline inventory in the interim of time. "Time", once again is biting Boeing in the foot. Make an announcement on an exciting all-new airplane, and your customers await impatiently. The old stuff ordered two years ago now seems older before it arrives. The important item Boeing is trying to address is how do you satisfy a customers impatience of needing new stuff for its own customers. Delta Airline when it double reversed Boeing through ordering the A330 NEO and A350's before Boeing's 777X arrives in 2020. Airbus will start delivering now with the A350, and later with the A330 NEO to its customers while the 777X project is still on the computer graphics card.

Boeing needs to recognize its predicament with both the 777X and 787-10 projects. The 777-300-ER is a great machine but it's not new. A Customer's sensibility, which needs to be addressed by Boeing in more transitional tones. The sales and PR team need to huddle on this one. Neither is the 777X coming soon nor is the 787-10 coming soon. Even if a customer orders a 787-10 now as a bridge to the 777X, before it can even get a 777X, the customer is stuck waiting for just the same. However, Airbus is quick to point out they are starting to deliver A-350's in December.

"We" will start to deliver A 330 Neo's in three years, what do you think about that?"

The customer retorts, "where would I be on the order list?"

Airbus can say, "way further up front in line than you would be, if you ordered the 787-10. The 777-yawner-300-ER is available, but why would anyone even consider that, when "we" have all new technology way ahead of the 777-300-ER?"

People want the new shiny stuff over getting last decades stuff.

Boeing must tackle these perceptions in the marketplace on with the 777-300-ER as its go-to gap filler since the 787-10 has not been built or tested as a provisional Gap filler for the 777X. The wait on the 787-8 or-9 is longer than the A330-NEO. Instant gratification is a terrible beast Boeing needs to be slain, by making a better deal or a creative methodology through a purchasing plan. Boeing could bridge the 777-300-ER to the 777X with a Lease-Buy incentive program. Lease a 777-300-ER through to 777X's entry into service (in 2020), and have buy options exercised on a like numbered 777X or keeping the leased 777-300-ER when the 777X is scheduled for customer building. The lease can also build equity towards a purchase of the 777X, partnering with Boeing, and the lessor company with those leased the 777-300-ERs during 2016 and later.

The mumble jumbo of it all, It that the customer will win in the exchange of equipment, The leasing company will not have Inventory risk, as it is backed by Boeing with a set buy-back price for each unit leased by the leasing company. Boeing will then have to sell the future returned leased equipment to a secondary market, which it should cultivate during the interim lease period.

That is big picture gibberish, which in all effect there is a heavy discount for the customers leasing a 777-300-ER and an incentive for buying the 777X through options. The Lessor also does well as Boeing sells more of this generation and next generation 777 through the lessor.

Boeing needs to build its own bridge during the 777 process.

Airbus Had a Week

It was all about the window and not the aircraft, so Boeing would reel back and commiserate as Airbus took in 17 billion in orders last week. Especially the Delta Airways order really bites. It's a slap across the chin in French fashion. All because of a window? That is correct, you can have the best offering of aircraft the most advanced, but other important items are in play, and it has nothing to do with what's best or the most efficient equipment. That window is the year 2018. Much like an "end of the year car sales" Timing is everything for a customer.  It is the "window of time" I am talking about, that bites Boeing. Here are a few check list items met by Airbus that Boeing couldn't touch. 

• Delivery window for Airbus is right where Delta Airlines needs it.
• Price for those deliveries were revamped with its A330 NEO and a sweet deal on the A350.
• Fleet renewal capitalization window for Delta had its cash ducks in a row in a narrow time.
• Fleet expansion/operations inconvenience, and training window mitigation had to be exact.
• 787-9 orders could be bumped further back into limbo.
• Decision includes a certainty for meeting corporate goals and objectives within this window. 

In spite of all the wonderful things Boeing could offer, the Airbus deal was destine to fit Deltas corporate sensibilities? Boeing's Achilles heel was exposed as mentioned in an earlier blog. Boeing has done a masterful Job of loading the 787 order book up leaving it stuck in the cement of backlog. The only way out is to build more 787's faster. Airbus looks at this predicament and chuckles. Boeing has outdone themselves in catching up. Now Airbus can cherry pick on Boeing's heel. Delta Airlines is a case in point. Pin prick and cut Boeing with a thousand slices until it bleeds out.

However, Boeing knows this, as lessons again were learned during this week on the Delta Airlines deal. Boeing was squeezed out of Delta's delivery window and Airbus stepped in.  The answer is found on the production floor. They will need 12, 787 a Month sooner rather than later. They will have to stop Airbus from cherry picking around the “Time Window". The "Air War" is reaching a fever pitch in the market place. Boeing needs a bigger window (of time) throughout its line of aircraft. They need to synchronize with its customers and regain some order book flexibility relevant with any Airbus' timeliness.

The competition is after Boeing's backlog situation, not the aircraft performance metrics. Even those metrics are very important to operations and advertisement departments, but the other side of the buy quotient is the time window. Which can negate those advantageous operational metrics when competing advantages are slim. Boeing has lost the Time window in this case and it needs to gain it back. It is a difficult task measuring a backlog build-up. When you have over 837 units yet to be built. It's a balancing act with corporate goals, aircraft model perceptions, and competitive advantages at stake.

• Boeing needs a big backlog for Stock Holders
• Boeing need a smaller backlog for customers who are ready to order
• Boeing needs a bigger backlog for bragging rights, and advertising
• Boeing needs a smaller backlog, accommodating more market flexibility
• Boeing needs a bigger backlog optimizing plant production and lowering production cost
• Boeing needs a smaller backlog as it has saturated its capabilities with orders.

Without intensive study on this matter you see Airbus in the smaller backlog position and Boeing in the higher backlog position. Somewhere in this observation Boeing is tasked with controlling the backlog. It can only be done on the factory floor. Boeing must aggressively market its family of aircraft. It must not turn an order off from a Boeing offer. It must have its foot on the throttle and take on all orders in a timely fashion. The problem lies in its production capacity, and how it can lay-up on its production or increase it for more deliveries. It has to have the same commitment and flexibility with its suppliers. This build up model becomes complex and Airbus has thought long and hard on how it can expose Boeing. It has done so with the Delta order. Delta assented with its 14 billion dollar order.

Boeing must build its production lines handling a five year backlog at maximum, and a three year minimum. That backlog can be feathered by using lower or increasing monthly production numbers achieving a five year optimal plan. Boeing has done this to some extent with its extra 787 line in Everett, WA. and its plant expansion in Charlotte, SC. However, if they take on a slug of more 787, 737 and 777 orders in the next two years, they will have to re-work production capacity to remain competitive from the window of time perspective. If the factory pace goes beyond five years from an increase of sales, and enters into seven year back log category, they will need to increase production taking the backlog back to five years levels or lower.  Otherwise they will be exposed by Airbus again. 

Boeing can win the Air Wars if they have an effective change management plan where flexibility is the core function. Having the square footage, equipment, and supplies at the ready for any implementation of plant and facility change needed, at the drop of a memo.

It should read,

Greetings:

• We need 52 a month 737's for the next six months and further, 
• We need 12 a month 787's this year
• we need 10 777's fiscal 2020 all generations

"do It!"

cc "Everybody"

I believe that memo was sent several years back at Boeing. The Delta Airline deal with Airbus is a “too little too late” for Boeing.

Chances Are... Airbus Makes A Date With Delta

Chances are Boeing knew it was on the outs 4 months ago with Delta Airlines. Airbus was in. Airbus received the good news yesterday, Delta had chosen Airbus for 50 A330's and A350's over Boeing's offering of 787-9's and 777X's. What happened to Boeing is that, they weren’t invited to the Delta Airline prom? If looking at side by side comparisons, then Boeing should go to the prom. However, Airbus exploited Boeing's order book weakness. Wait Time! It wasn't about who has the best, but it’s more about Delta's fleet expansion plans. It couldn't wait. Airbus said it could pull up to Delta's curb sooner than Boeing, by a long shot. They have a shorter order book line in the wide body division.

Boeing's success has them backed into a corner when it comes to timeliness. Airbus swooned right in with a sooner rather than later bid. Any solace found in that sentiment? No! Airbus now has the reorder high ground over Boeing when Delta needs more units later on. A Boeing disaster? Yes, to say the least. They just stepped in its own success having a larger order book and a developing 777X production line.

Delta must also have discussed new Airplane model risks, in light of the problematic 787 entry into service debacle. Airbus of course would pounce on that saying they have mitigated every possible new airplane mishap potential before first delivery. The only Airbus question mark is the daily wear and tear from operations any existing airplane goes through each day. “They will have no Airbus battery fires delays here”, says the Airbus team. They made its case months ago, and Delta was waiting until purchasing ducks were in a row. 

Boeing also knew months ago, it was late for Delta date and would not participate. However, Delta is not the only airline around even though she's very popular. Airbus gains some bragging rights. It gains a lucrative market place. It also makes it relevant in airplane wars once again. Boeing lost this one big time, a long time ago. Out flanked and surprised by a lessor foe. In war these things happen, when the big picture gets too big. Remember the Battle of The Bulge in World War II. An almost, but for want of fuel. The allies regrouped and came back.

Boeing has to keep on keeping-on, and balance the order book to keep in a relevant range of order response. The 840 plus 787’s in waiting is too big. They must keep it 48 months out not 84 months out. It’s more about the wait time then who has the best by judging size of order book. The airline parity is close enough, that timing may trump the differences. Even if Boeing is better on several important points, as found in fuel burn and amenities. An Airline expansion/renewal timing is more critical. Late order book departures kill an airline as fast as consistent late airport departures. Delta needed an on time fleet renewal. Boeing got burnt and will continue to get burnt with the current comparative back log with Airbus and Boeing. 

The current Delta order loss, as damaging as it is to Boeing, solves one problem. It brings comparative order books closer to equivalency. Boeing, in six more months of production of its 787 will have drained the order book sponge by fifty more units, putting the backlog between the duopoly in a pitch battle for orders when it comes to delivery timing. If Boeing could have delivered sooner rather than later with quality assurances, they would have, and should have won this bid. It’s a should of, would of, could of bid loss.